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Global Climate Change

Investment Objective

Schroders Global Climate Change seeks to provide capital growth primarily through investment in equity securities of worldwide issuers which will benefit from efforts to adapt to, or mitigate climate change.

We do not define a specific performance target but we believe that over time, companies well-positioned with regard to climate change will significantly outperform broad world indices.

Description

Our global climate change strategy invests in companies that create products or offer services which help to mitigate or adapt to the effects of climate change.

Mitigation: Things we can do to prevent the worst of future climate change. For example, companies developing new technologies to reduce greenhouse gas emissions.

Adaptation: The changes we will have to make to accommodate the effects of climate change. For example, companies that construct buildings designed to withstand more extreme weather.

What will the strategy not invest in?

Companies where the investment case is not significantly affected by climate change

Companies whose products decrease in demand due to climate change

Companies that do not recognize and embrace the importance and impact of climate change

Schroders Global Climate Change comprises five main themes: Energy efficiency; Low carbon fossil fuels; Clean energy; Sustainable transport; Environmental resources. We think that these areas will benefit most from efforts to mitigate or adapt to climate change, representing the greatest opportunities for investors.

Management Team

The Global Climate Change Team is led by Simon Webber. Simon is directly responsible for all decisions made within the strategy and has a detailed knowledge of all companies in which investments are made. He is supported by Global Sector Specialist, Dan McFetrich, a dedicated equity analyst and two Climate Change Specialists, as well as the broader Global and International Equities investment team. In addition, the Global Climate Change Team is able to leverage the research output of over 90 experienced investors located globally, consisting of locally-based equity analysts, and specialist teams of small cap, energy, commodities and agriculture investors.

Simon Webber, CFA

Simon Webber is a Lead Portfolio Manager on the Global and International Equity Team, with primary responsibility for international equity strategies. Simon is based in London and has been a portfolio manager on the team since 2007, with promotion to Lead Portfolio Manager in October 2013. Simon joined the team in September 2004 as a Global Sector Specialist.

Simon Webber, CFA

Simon Webber is a Lead Portfolio Manager on the Global and International Equity Team, with primary responsibility for international equity strategies. Simon is based in London and has been a portfolio manager on the team since 2007, with promotion to Lead Portfolio Manager in October 2013. Simon joined the team in September 2004 as a Global Sector Specialist.

Investment Philosophy

We believe that:

Companies that recognize the threats and embrace the challenges early, or that form part of the solution to the problems linked to climate change, will ultimately outperform the broader market.

In-depth fundamental research is the most reliable means of identifying such companies and appraising future earnings growth relative to market expectations.

Material differences between underlying company fundamentals and market estimates exist due to three persistent market inefficiencies:

Markets over-reacting to short-term news flow

Markets extrapolating historic growth and failing to correctly interpret catalysts that change the trajectory of growth

Markets failing to look far enough ahead when appraising the earnings power of companies

What is distinctive about our philosophy is our appreciation that climate change will have huge consequences for companies across a broad range of industries and affect a great many more companies than those purely involved in renewable energy, energy efficiency and environmental resources.

Investment Process

The strategy utilizes a bottom-up, fundamental research driven approach. Stock selection is the primary driver of performance, with proprietary company research key to our investment process.

Our first task in the process of stock selection is to determine a universe of companies from the global investment universe whose long-term business outlook, in our opinion, is significantly impacted by efforts to mitigate or adapt to climate change. We have built a team process and supporting systems that draw on a range of inputs to identify companies where climate change is a significant positive to the business outlook. The climate change universe review team consists of Simon Webber, Dan McFetrich, Owen Scarrott, Isabella Hervey-Bathurst, Andrew Howard and Marc Hassler.

Given rapidly changing business impacts, it is not possible to have simple percentage rules for the amount that a company is positively or negatively impacted by climate change. Therefore, the team assesses relevance based on the factors below. The overarching principle is that climate change must have a significant impact on the long term investment outlook for a stock to be included. A company’s management and strategy is assessed on the following basis:

Is there significant direct industry exposure to climate change trends?

What proportion of business segments potentially are exposed to climate change trends?

Is investment and R&D spending in the relevant area significant?

How does the product portfolio position the company for the future effects of climate change?

When assessing the significance of climate change on an investment case, we consider the impact of all these factors on expected revenue growth, operating margin and capital intensity of the company. Stocks in the universe are then classified as beneficiaries of either adaptation to or mitigation of the effects of climate change.

From the climate change database, existing best ideas from the Global Sector Specialists and regional small cap team are automatically selected as best ideas for the strategy. Additional stock ideas, either generated by the team or by other sector strategies, are researched from the universe by the portfolio managers. This produces a pool of 50 - 100 best ideas from which a portfolio of 40-60 names is constructed.

Key Features

Invests in companies involved in efforts to mitigate or adapt to climate change

Aims to outperform the MSCI World index, not limiting the fund to a single sector

Unconstrained, our "best ideas" portfolio of 50–100 stocks

Truly global portfolio covers a vast array of business sectors and a diverse range of company size

*The strategies listed include those which may be subject to the ability to meet investment minimums and other specific criteria, and may not be directly available to U.S. retail investors.

There can be no guarantee these strategies will be successful or that the investment objective can be achieved.

Investment risks: All investments, domestic and foreign, involve risks including the risk of possible loss of principal. The market value of the portfolio may decline as a result of a number of factors, including adverse economic and market conditions, prospects of stocks in the portfolio, changing interest rates, and real or perceived adverse competitive industry conditions. Investing overseas involves special risks including among others, risks related to political or economic instability, foreign currency (such as exchange, valuation, and fluctuation) risk, market entry or exit restrictions, illiquidity and taxation. Emerging markets pose greater risks than investments in developed markets.

Please consider a fund's investment objectives, risks, charges and expenses carefully before investing. To obtain this and other information on any Schroders Fund, please click the following link:prospectuses. Read the prospectus carefully before investing. To obtain any further information call your financial advisor or call Schroder Mutual Funds at (800) 464-3108 for Individual Investors.

Schroder Investment Management North America Inc. (“SIMNA”) is an SEC registered investment adviser providing asset management products and services to clients in the US and Canada. SIMNA is an indirect wholly owned subsidiary of Schroders plc, a UK public company with shares listed on the London Stock Exchange, and is an SEC registered investment adviser providing asset management products and services to clients in the US and Canada. Schroder Fund Advisors LLC (“SFA”) is a wholly-owned subsidiary of SIMNA Inc. and is registered as a limited purpose broker-dealer with FINRA and markets certain investment vehicles for which SIMNA Inc. is an investment adviser. The Schroder mutual funds (the “Funds”) are distributed by SEI Investments Distribution Co (“SIDCO”), a member ofFINRA. SFA previously served as the distributor of the Funds. Although SFA has been replaced by SIDCO as the distributor of the Funds, SFA continues to be involved in the distribution of shares of the Funds through an agreement with SIDCO, and SFA, SIMNA and their affiliates continue to provide shareholder services to the Funds. SIDCO is not an affiliate of Schroders plc.

Schroder Adveq Management US Inc. (“Schroder Adveq US” or “Schroder Adveq” herein) is registered as an investment adviser with the SEC. It provides asset management products and services to clients in the United States and Canada. Schroder Fund Advisors LLC (“SFA”) markets certain investment vehicles for which Schroder Adveq US is an investment adviser. SFA is an affiliate of Schroder Adveq US and is registered as a limited purpose broker-dealer with the Financial Industry Regulatory Authority. Schroder Adveq US is an indirect, wholly-owned subsidiary of Schroders plc. For more information, visit www.schroderadveq.com

Secquaero Advisors AG (Secquaero) is a Zurich-based investment firm in which Schroders plc has a majority ownership stake, and provides non-discretionary advice to certain strategies, including Insurance-linked securities, marketed in North America.